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  • Seven Ways to Play Both Oil Scenarios [View article]
    The reason for contango: there is a lot of oil coming in which was sold in June-July for $100+. It's coming in now, producers already locked price for it, so demand on the spot and near-term markets is much lower than expected. Probably there was less oil sold for delivery in June. But those who is speculating on contango now will bring June price down, because there will be a lot of oil coming with price locked at $50+. Story repeats until last year's oil futures bubble completely worked out.

    If you think that oil is going up, just buy USO. Much simpler than buying companies. Besides, you don't know exactly how these companies hedged oil on future markets and hedging might affect results much more than current price moves.
    Jan 16 16:34 pm |Rating: +3 -1 |Link to Comment
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